Ananda Marga Pracaraka Samgha Ltd v Tomar (No 6) - [2013] FCA 284

FEDERAL COURT OF AUSTRALIA
Ananda Marga Pracaraka Samgha Ltd v Tomar (No 6) [2013] FCA 284

Citation: Ananda Marga Pracaraka Samgha Ltd v Tomar (No 6) [2013] FCA 284

Parties: ANANDA MARGA PRACARAKA SAMGHA LTD (ACN 003 193 897), DEVENDHRAN VADIVELOO PILLAY and PRABANJAMURTHI PILLAI v SUNIL KUMAR SINGH TOMAR, CLAUDIA ALISTER, RICHARD PFEIFFER, TIWARI DAYASHANKAR, PAUL ALISTER, DIETER DAMBIEC, JAKE KARLYLE, LUKE DEACON, MIRAI DEACON, MICHAEL TOWSEY and DHARANENDRAN PARTHY

File number: VID 208 of 2010

Judge: DODDS-STREETON J

Date of judgment: 3 April 2013

Catchwords:
CORPORATIONS – Company limited by guarantee – objects include “to propagate the ideals, the philosophy and practice” of the Ananda Marga religion – all members typically directors – worldwide schism in Ananda Marga movement and emergence of two competing central administrations in Ranchi and Kolkata, India – company’s board resolves not to follow without scrutiny any directives of central administration – dispute over identity of members of company – defendants resolve to remove plaintiff directors – defendants allege membership of plaintiffs and their associates in breach of corporate objects and implied terms of constitution due to loss of good standing with Ranchi administration – whether membership of plaintiffs and their associates terminated - construction of company’s constitution – whether Ranchi administration and office holders hold legitimate authority in Ananda Marga – whether plaintiffs and their associates deprived of good standing in Ananda Marga – whether plaintiffs and their associates members of company – whether third to eleventh defendants members of company.

CORPORATIONS – Oppression – s 232 of Corporations Act 2001 (Cth) – whether plaintiffs’ membership or control of company contrary to the legitimate expectations of members and purposes of incorporators – whether plaintiffs withheld financial information from first defendant or held meetings on short notice.

CORPORATIONS – whether just and equitable to wind company up – ss 233 and 461(1)(k) of Act – whether failure of company’s substratum – whether deadlock – whether practically impossible for company to carry out its activities due to bifurcated board and incapacity to identify members – effect of multiple contraventions of Act – whether alternative to winding up.

Legislation: Corporations Act 2001 (Cth) ss 46, 53, 168(1), 169(1), 231, 232, 233(1)(a), 234, 248C, 248D, 292, 301, 314, 317, 461(1)(k), 465A, 1322(4)
Charitable Collections Act 1934-41 (NSW)
West Bengal Societies Registration Act 1961 (India)

Cases cited:
Ananda Marga Pracaraka Samgha (ACN 003 193 897) v Tomar [2010] FCA 565 cited
Ananda Marga Pracaraka Samgha Ltd v Tomar (No 2) [2010] FCA 1342 cited
Ananda Marga Pracaraka Samgha v Tomar (No 4) [2012] FCA 385 cited
Ananda Marga Pracaraka Samgha v Tomar (No 5) [2012] FCA 390 cited
Ananda Marga Pracaraka Samgha & Ors v Acarya Raghunath Prasad & Ors (Unreported, Court of the Civil Judge (Senior Division) Purulia, West Bengal Title Suit No 305 of 2003, 18 March 2006) considered
Bentley v Anglican Synod of the Diocese of New Westminster (2010) 326 D.L.R. (4th) 280 discussed
Bratton Seymour Service Co Ltd v Oxborough [1992] 13 BCLC 693 cited
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 considered
Dhami v Martin (2010) 79 ACSR 121; [2010] NSWSC 770 cited
Ebrahimi v Westbourne Galleries Ltd [1973] AC 360; [1972] 2 All ER 492 cited
Egyptian Salt and Soda Co Ltd v Port Said Salt Association Ltd [1931] AC 677 cited
General Assembly of the Free Church of Scotland v Overtoun [1904] AC 515 considered
Gregor v British-Israel World Federation (NSW) (2002) 41 ACSR 641 discussed
International Hospitality Concepts Pty Ltd v National Marketing Concepts Inc (No 2) (1994) 13 ACSR 368 cited
Kopilovic v Gatley (2005) 53 ACSR 64 considered
Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1 discussed
Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692; 5 ACLC 222 cited
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 45; 208 ALR 213; [2004] HCA 35 cited
Re a Company (No 00709 of 1992); O’Neill v Phillips [1999] 2 All ER 961; [1999] 1 WLR 1092 cited
Re a Company (No 007623 of 1984) (1986) 2 BCC 99,191 cited
Shirim Pty Ltd v Fesena Pty Ltd (2000) 35 ACSR 221 cited
Simon v HPM Industries Pty Ltd (1989) 15 ACLR 427 cited
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; 211 ALR 342; [2004] HCA 52 cited
Toole v Flexihire Pty Ltd (1991) 6 ACSR 455 considered
Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45 considered
Wondoflex Textiles Pty Ltd [1951] VLR 458 cited

Federal Court of Australia Practice Note CM7
Brown L, Shorter Oxford English Dictionary: on historical principles (6th ed Oxford University Press, 2007)
Halsbury’s Laws of India, (New Dehli ed, LexisNexis, 2002) Vol 7, Civil Procedure, ‘3 Types of Injunctions’

Date of hearing: 26 and 27 March, 2 April to 5 April, 11 to 13 April, 16 and 17 April and 23 and 24 April 2012

Date of last submissions: 24 April 2012

Place: Melbourne

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 621

Counsel for the Plaintiffs: Mr C Gunst QC with Mr M Irving

Solicitor for the Plaintiffs: Holding Redlich

Counsel for the Defendants: Mr BE Walters SC with Mr TR Messer

Solicitor for the Defendants: Moores Legal

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 208 of 2010

BETWEEN:
ANANDA MARGA PRACARAKA SAMGHA LTD (ACN 003 193 897)
First Plaintiff

DEVENDHRAN VADIVELOO PILLAY
Second Plaintiff

PRABANJAMURTHI PILLAI
Third Plaintiff

AND:
SUNIL KUMAR SINGH TOMAR
First Defendant

CLAUDIA ALISTER
Second Defendant

RICHARD PFEIFFER
Third Defendant

TIWARI DAYASHANKAR
Fourth Defendant

PAUL ALISTER
Fifth Defendant

DIETER DAMBIEC
Sixth Defendant

JAKE KARLYLE
Seventh Defendant

LUKE DEACON
Eighth Defendant

MIRAI DEACON
Ninth Defendant

MICHAEL TOWSEY
Tenth Defendant

DHARANENDRAN PARTHY
Eleventh Defendant

JUDGE:

DODDS-STREETON J

DATE OF ORDER:

3 APRIL 2013

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.The parties are directed to confer and in the event of agreement file and serve on or before 4.00pm on 24 April 2013 joint proposed minutes of orders (including as to costs) reflecting the reasons for judgment published on 3 April 2013 in relation to:
a.the plaintiffs’ amended application dated 16 April 2012; and
b.the defendants’ further amended cross claim dated 4 November 2011 (save in relation to the relief sought pursuant to s 461(1)(k) of the Corporations Act 2001 (Cth) referred to in paragraph C(2) of the prayer for relief).

2.In the event that the parties cannot agree as to the appropriate minutes of orders, each party shall file and serve on or before 4.00pm on 24 April 2013 proposed minutes of orders together with written submissions (not to exceed 10 pages) in support.
3.The parties are directed to confer and in the event of agreement shall on or before 4.00pm on 24 April 2013 file a minute proposing a maximum number of three experts to prepare the report referred to in paragraph 620 of the reasons for judgment, together with a brief statement of the experts’ qualifications and estimated fees and costs.
4.In the event the parties are unable to reach the agreement referred to in order 3, each party is directed to file and serve on or before 4.00pm on 24 April 2013 a minute proposing a maximum number of two experts together with a brief statement of the experts’ qualifications and estimated fees and costs.
5.The further hearing of the proceeding is adjourned to a date to be fixed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 208 of 2010

BETWEEN:
ANANDA MARGA PRACARAKA SAMGHA LTD (ACN 003 193 897)
First Plaintiff

DEVENDHRAN VADIVELOO PILLAY
Second Plaintiff

PRABANJAMURTHI PILLAI
Third Plaintiff

AND:
SUNIL KUMAR SINGH TOMAR
First Defendant

CLAUDIA ALISTER
Second Defendant

RICHARD PFEIFFER
Third Defendant

TIWARI DAYASHANKAR
Fourth Defendant

PAUL ALISTER
Fifth Defendant

DIETER DAMBIEC
Sixth Defendant

JAKE KARLYLE
Seventh Defendant

LUKE DEACON
Eighth Defendant

MIRAI DEACON
Ninth Defendant

MICHAEL TOWSEY
Tenth Defendant

DHARANENDRAN PARTHY
Eleventh Defendant

JUDGE:

DODDS-STREETON J

DATE:

3 APRIL 2013

PLACE:

MELBOURNE

REASONS FOR JUDGMENT
INTRODUCTION

In this proceeding the parties are in dispute over the identity of the members and directors, the construction of the constitution and the control and future disposition of the first plaintiff, Ananda Marga Pracaraka Samgha Ltd (“the company”). The company is a company limited by guarantee incorporated in 1986, which has, as a principal object, “to propagate the philosophy, the ideals and practice of Ananda Marga which is an autonomous religion, faith and social system…”
All parties (save for the company) and many of the witnesses were followers of Ananda Marga, which originated in India, where significant conflict and divisions occurred in late 2002 or early 2003.
It was common ground that the company has substantial assets (with an estimated value of approximately $20 million) and an annual income of about $1 million. It engages in charitable activities and conducts a substantial business enterprise, including a number of schools, yoga and meditation courses, festivals and retreats. It sponsors visa applications by Ananda Marga monks and nuns. It is a recipient of government grants and charitable donations and has considerable outgoings, including the payment of teachers’ salaries, workers’ compensation, public liability insurance and mortgage instalments.
The company did not play an active role in the litigation, although formally a plaintiff. See Ananda Marga Pracaraka Samgha Ltd v Tomar (No 2) [2010] FCA 1342.
The second and third plaintiffs, Devendhran Vadiveloo Pillay and Prabanjamurthi Pillai (for convenience, “the plaintiffs”) contended that there are eight members of the company, being themselves, Claudia Alister, Sunil Kumar Singh Tomar, Karl Robins, Arati Nayak, Colm Largey and David Tanner, who were admitted according to the procedures expressly prescribed for membership in the company’s articles of association; and that there are five directors (Messrs Pillay and Pillai, Ms Alister, Dr Tomar and Ms Nayak), who were elected pursuant to the procedures prescribed by the articles and have not been removed by any valid resolution or lawful means under the company’s constitution, the Corporations Act 2001 (Cth) (“the Act”) or otherwise.
For convenience, in these reasons, I shall refer to the register of members comprising the following persons (whom the plaintiffs identify as members) as “the plaintiffs’ register”:
(1)Mr Pillay
(2)Mr Pillai
(3)Ms Nayak
(4)Mr Tanner
(5)Mr Largey
(6)Mr Robins
(7)Dr Tomar
(8)Ms Alister
The defendants contended that they are all members of the company and that the first defendant, Dr Tomar and second defendant, Ms Alister are directors. They deny that the persons on the plaintiffs’ register (save for Dr Tomar and Ms Alister) are members. For convenience, I shall refer to the register of members comprising the following persons (whom the defendants identify as members) as “the defendants’ register”:
(1)Mr Pfeiffer
(2)Mr Tiwari
(3)Mr Alister
(4)Mr Dambiec
(5)Mr Karlyle
(6)Mr Deacon
(7)Ms Deacon
(8)Mr Towsey
(9)Mr Parthy
(10)Dr Tomar
(11)Ms Alister
The defendants also contended that the company may have additional members to those on either the plaintiffs’ or the defendants’ register, as the evidence established that members who were previously assumed to have resigned in the past had not in fact done so.
The articles provide that a director of the company must be a member, and if a person ceases to be a member, he or she is disqualified from holding office as a director. The directors are elected by the members. Accordingly, a determination of the identity of the members is crucial to the control of the company.
Although the parties agreed that Dr Tomar and Ms Alister are members and directors of the company, the identity of all other members and directors of the company was in dispute.
The defendants conceded that:
(a)save for Dr Tomar and Ms Alister, the persons on the defendants’ register did not obtain membership of the company by following the procedures expressly prescribed for that purpose in the articles; and
(b)the alleged loss of membership by persons on the plaintiffs’ register did not depend on any express provision of the constitution.
Rather, the defendants maintained that, save for Dr Tomar and Ms Alister, the persons on the defendants’ register acquired membership of the company when and because they became members of certain committees which the defendants allege are sub‑committees or advisory boards of the company within the meaning of art 49 or 50, or are otherwise committees in the wider Ananda Marga organisation, membership of which confers, by convention, membership of the company. Alternatively, the defendants alleged that the relevant persons became members of the company pursuant to membership agreements executed by Dr Tomar and Ms Alister on behalf of the company on various dates between 7 and 25 February 2010.
Up to the time of trial, the defendants alleged that Messrs Pillay and Pillai were removed as directors at a members’ meeting of the company convened by Dr Tomar and held on 20 March 2010, and, more fundamentally, that the membership of all persons on the plaintiffs’ register was terminated pursuant to implied terms of the constitution. That position shifted at trial when the defendants disavowed reliance on the proceedings at the meeting on 20 March 2010 and no longer contended that it was a valid meeting of the company. They also abandoned their allegation that there were implied terms of the constitution, pursuant to which most of the persons on the plaintiffs’ register ceased to be members. Instead, as I understood their argument (which shifted during the course of the trial) the defendants alleged that those persons lost their membership of the company because it was fundamentally incompatible with the object in cl 2(a) of the memorandum that the company “propagate the philosophy, the ideals and practice of Ananda Marga…”.
The defendants did not dispute that the persons on the plaintiffs’ register (save for Messrs Tanner and Largey) had obtained membership by the process set out in the articles, of a written application, a proposer and seconder, acceptance by the board and payment of a subscription. The defendants disputed, however, that Messrs Tanner and Largey had ever become members of the company, contending at trial (although they did not plead) that the meeting of the company’s committee (that is, the board) on 17 March 2010 (in which the membership of Messrs Tanner and Largey was approved) was invalidated by unreasonably short notice and an inadequate description of the business to be transacted.
The defendants’ allegation that the membership of persons on the plaintiffs’ register was contrary to the objects of the company (and thus had been or should be terminated) overlapped with their alternative claims based on oppression under s 232 of the Act and winding up on the just and equitable ground under s 461(1)(k) of the Act. It depended on a series of cascading and at points highly elusive and shifting propositions, all of which were essential elements of the defendants’ case.
As I understood their case, the defendants alleged:
(1)First, that Ananda Marga is a hierarchical, authoritarian religion with a global “chain of command” prescribed by the scriptural writings of its Founder, including, importantly, a highly revered text known as Carya Carya, within which particular high office holders (most significantly, the General Secretary and the Purodha Pramukha) exercise absolute authority over “members” of Ananda Marga, and are empowered, inter alia, to:
(a)issue directives or orders to a monastic follower of Ananda Marga, including orders to transfer from one country to another (“posting orders”) on disobedience of which (subject to appeal) the follower will lose his or her status as a monk or nun, religious titles and “good standing as a member of Ananda Marga”; and
(b)authoritatively declare that a non‑monastic follower of Ananda Marga is suspended from representing or discharging official functions in the Ananda Marga religion or organisational system, upon which a lay “member” of Ananda Marga will lose “good standing”.
(2)Secondly, that the powers attaching to the positions of supreme authority (the Purodha Pramukha and the General Secretary) within both the unincorporated Ananda Marga organisation in India referred to in Carya Carya and an associated society in West Bengal registered under the West Bengal Societies Registration Act 1961 (India) (“the West Bengali Society”) currently vest in one and the same person, Acarya Dhruvananda Avadhuta (“Dhruvananda”), who heads an Ananda Marga administration based in Ranchi, India, and is the validly elected or appointed General Secretary of both the unincorporated organisation and the West Bengali Society, and is also the Acting Purodha Pramukha.
(3)Thirdly, that Dhruvananda had exercised his legitimate authority to:
(a)direct valid posting orders to all those members of the company on the plaintiffs’ register who were monks or nuns of Ananda Marga (save for Dr Tomar) requiring them to transfer from Australia to another geographical region of the world, which they disobeyed, and from which they failed to appeal successfully or at all;
(b)direct letters to the lay members of the company on the plaintiffs’ register who have supported the plaintiffs in this litigation, declaring that they were suspended from “representing, Ananda Marga”, having any position in Ananda Marga in the Suva Sector or “any entitlement to hold assets or to exercise authority over assets or the property” of the organisation in the Suva Sector; and
(c)declared his approval of decisions of relevant boards within the unincorporated Ananda Marga organisation in India to cancel the spiritual titles of, among others, Mr Pillay, Ms Nayak, Mr Largey and Mr Robins.
(4)Fourthly, that the company was incorporated with the intention and for the purpose of embodying, in the form of an Australian corporation, the scripturally prescribed hierarchical organisation of the Ananda Marga religion based in India.
(5)Fifthly, that having lost their good standing as members of the Ananda Marga religion and organisation by reason of the matters in paragraph 16(3), none of the persons on the plaintiffs’ register could, consistently with the company’s objects, maintain (or acquire) membership of the company, which embodied and was the vehicle of the legitimate Indian religious organisation in Australia.
Alternatively, the defendants alleged that if the persons on the plaintiffs’ register who had lost their good standing as members of Ananda Marga were not, on a proper construction of the company’s constitution, consequently deprived of membership of the company, their continuing membership (and, where applicable, directorship) nevertheless constituted oppression pursuant to s 232 of the Act, the primary relief for which should include orders for their removal.

The defendants’ oppression case, as pleaded, was based solely on the continued membership of the persons on the plaintiffs’ register who had allegedly lost their good standing in Ananda Marga due to disobedience of posting orders, deprivation of spiritual titles and (or alternatively) declarations of suspension. The defendants alleged that the membership of (or control by) such persons would be contrary to the subscribers’ intention and members’ legitimate expectation that the affairs of the company would be conducted consistently with the rules and practices of Ananda Marga, and would be contrary to the sole purpose of the company’s incorporation as a vehicle for Ananda Marga in Australia. No other conduct or circumstance constituting oppression was pleaded. The pleaded oppression claim thus largely coincided with the challenge to the membership of those on the plaintiffs’ register. It was also wholly contingent upon the defendants’ failure to establish that the membership of those on the plaintiffs’ register had terminated.
At trial, the defendants also relied on Dr Tomar’s evidence that Mr Pillay withheld certain financial information and held company meetings on short notice to support the oppression claim.
The defendants sought winding up of the company as alternative relief for oppression under s 233(1)(a) of the Act and on the just and equitable ground pursuant to s 461(1)(k) of the Act. They did not, however, plead material facts or particularise a separate case for winding up the company on the just and equitable ground. During the course of the trial, the defendants sought to cross‑examine Mr Pillay about possible misconduct in relation to two sales of corporate property in 2008 and 2009 respectively, which I permitted only in relation to credit, as it was neither relevant to the defendants’ pleaded case which the plaintiffs had prepared to meet, nor included in the defendants’ written submissions. The defendants also cross‑examined Mr Pillai and Ms Nayak about contraventions of requirements of the Act. In final submissions, the defendants contended that if their case on membership failed, the evidence of the company’s and the directors’ contraventions of the Act over a lengthy period of time (although not pleaded) together with “deadlock” and failure of the company’s substratum, constituted grounds for winding up.
The plaintiffs contended that the persons on the plaintiffs’ register all acquired membership through the prescribed process of application but acknowledged that Mr Largey’s application form was not signed by the proposer and seconder, as required by the articles. They sought an order under s 1322(4) of the Act that Mr Largey’s application was not invalidated by reason of the omission.
The plaintiffs submitted that the articles provided clear and exhaustive rules for the acquisition and termination of membership of the company. Further, they submitted that the memorandum was not ambiguous and the articles and memorandum, whether separately or together, did not expressly or implicitly require a company member to be a follower of Ananda Marga who maintained good standing in the wider Ananda Marga organisation.
In the plaintiffs’ submission, fulfilment of the company’s primary object of propagating the philosophy, the ideals and practice of Ananda Marga was not incompatible with, and might even be assisted by, professionally qualified members or directors who were not adherents of Ananda Marga. Similarly, the object did not require a person’s membership to be terminated because he or she never had or lost “good standing” as a member of Ananda Marga. The plaintiffs further submitted that the company had consistently pursued and fulfilled its objects and the defendants did not allege otherwise.
The plaintiffs denied, moreover, that the relevant persons on the plaintiffs’ register had lost good standing in Ananda Marga (in so far as that concept had meaning) on the bases alleged or at all. The plaintiffs contended, in that context, that the Ananda Marga unincorporated organisation under Carya Carya, while hierarchical, was neither autocratic nor dictatorial, but rather, pluralistic, multi‑dimensional and consultative. Further, neither Carya Carya nor the West Bengali Society’s constitution (which had, in any event, no apparent application to those on the plaintiffs’ register) vested power in the General Secretary or Purodha Pramukha unilaterally to make posting orders. Nor did Carya Carya or the constitution demand unquestioning obedience to posting orders or empower the General Secretary or the Purodha Pramukha to punish those on the plaintiffs’ register for disobedience or for supporting the plaintiffs in the litigation by deprivation of their spiritual titles or declarations of suspension.
The plaintiffs further contended that even if Carya Carya and the West Bengali Society’s constitution conferred such powers on the General Secretary or the Purodha Pramukha, Dhruvananda was not the legitimate General Secretary or Acting Purodha Pramukha and could not exercise their powers.
The plaintiffs denied that the first and second defendants had suffered or would suffer oppression because those on the plaintiffs’ register were members of the company or due to denial of access to information, short notice of meetings or being consistently outvoted by a majority “bloc”. The plaintiffs also denied that the continuing membership of those on the plaintiffs’ register would cause deadlock, defeat the members’ legitimate expectations or cause the corporate substratum to fail.
The plaintiffs conceded that the company and its officers had failed in numerous instances to comply with statutory requirements and obligations over the last decade. They acknowledged that management of procedural matters had been amateurish and the company’s record keeping was deficient. They nevertheless submitted that they had not been fairly notified of, and had no reasonable opportunity to respond to, a claim to winding up based on contraventions or misconduct in relation to corporate transactions. The plaintiffs submitted that, more significantly, there was no evidence of serious misconduct, dishonesty or financial mismanagement. Much of the non‑compliance was in the past and was essentially procedural or technical in nature. While past company secretaries were most directly responsible for the contraventions, all the directors, including Dr Tomar and Ms Alister, shared the responsibility. Further, the plaintiffs acknowledged the deficiencies and had taken steps to address them. They submitted that in such circumstances, winding up or a referral to the Australian Securities and Investments Commission (“ASIC”) was not warranted.
For the reasons that follow, I concluded that the defendants did not establish their case on the membership and directorate of the company or oppression. Nor were the defendants’ principal grounds for winding up on the just and equitable ground established. Further, while the acknowledged contraventions are a matter of serious concern, particularly in a public company with extensive operations and assets, I considered that if satisfactory evidence is provided of appropriate measures to comply with outstanding statutory obligations and prevent recurrence of the contraventions, winding up would be an unduly drastic remedy.
I was satisfied that the persons identified by the plaintiffs were legitimate members and directors of the company and that an order under s 1322(4) of the Act should be made in relation to the formal deficiencies in Mr Largey’s application for membership.
WITNESSES
The plaintiffs relied on the following affidavits and witness statements:
(1)the affidavit of Prabanjamurthi Pillai sworn on 23 April 2010;
(2)the affidavit of David Tanner sworn on 23 April 2010 (but only paragraph 3);
(3)the affidavit of Arati Nayak sworn on 27 April 2010;
(4)the affidavit of Devendhran Vadiveloo Pillay sworn on 20 January 2012;
(5)the expert witness statement of Professor Sohail Inyatullah dated 21 March 2012 and affirmed on 17 April 2012;
(6)the witness statement of Marie Satya Anne Tanner dated 21 March 2012 and affirmed on 17 April 2012;
(7)the witness statement of Arati Nayak affirmed on 16 April 2012;
(8)the witness statement of Acarya Bhaveshananda Avadhuta affirmed on 13 April 2012;
(9)the witness statement of Shamilla Ajodha affirmed on 16 April 2012;
(10)the witness statement of Nityashuddh Anand dated 13 April 2012;
(11)the witness statement of Colm Largey affirmed on 16 April 2012;
(12)the reply witness statement of Devendhran Vadiveloo Pillay signed 4 April 2012;
(13)the reply witness statement of Prabanjamurthi Pillai affirmed on 16 April 2012; and
(14)the reply witness statement of David Tanner affirmed on 16 April 2012.
The plaintiffs relied on written submissions dated 21 March 2012 and 20 April 2012.
The defendants relied on the following affidavits and witness statements:
(1)the expert witness statement of Professor Lorne Dawson affirmed on 27 March 2012;
(2)the witness statement of Dr Sunil Tomar affirmed on 27 March 2012;
(3)the witness statement of Dr Ramesh Kohli affirmed on 2 April 2012;
(4)the witness statement of Acarya Svarupananda Avadhuta affirmed on 3 April 2012;
(5)the expert witness statement of Kumar Kappadath affirmed on 5 April 2012;
(6)the affidavit of Robert Clifford sworn on 13 April 2012; and
(7)the affidavit of Murray Baird affirmed on 22 April 2012.
The defendants relied on written submissions dated 21 March 2012 and 20 April 2012.
The following witnesses were cross‑examined:
(1)Nityashuddh Anand;
(2)Acarya Bhaveshananda Avadhuta;
(3)David Tanner;
(4)Prabanjamurthi Pillai;
(5)Colm Largey;
(6)Shamilla Ajodha;
(7)Arati Nayak;
(8)Professor Sohail Inyatullah;
(9)Marie Satya Anne Tanner;
(10)Dr Sunil Tomar;
(11)Dr Ramesh Kohli;
(12)Acarya Svarupananda Avadhuta;
(13)Professor Lorne Dawson; and
(14)Kumar Kappadath.
Many of the parties and witnesses had multiple religious titles and lengthy or alternative names. In these reasons, for convenience, I frequently use a single name and omit religious titles.
The expert witnesses, Professor Dawson, Professor Inyatullah, Squadron Leader Tanner and Mr Kappadath, were conscientious and direct witnesses. Professor Dawson’s relevant expertise was, however, ultimately very limited and he made a considerable number of significant concessions and qualifications. Mr Kappadath had expertise in Indian law but his evidence was subject to the limitations of the material provided to him. Further, for reasons stated below, it was necessary to qualify significantly some of Mr Kappadath’s conclusions.
Messrs Tanner, Largey and Pillai and Ms Adjodha and Ms Nayak, who gave evidence for the plaintiffs, were, in my opinion, candid, direct and reliable witnesses, whose testimony I accepted.
Mr Pillay and Dr Tomar were the principal lay witnesses for the plaintiffs and the defendants respectively. In my opinion, Mr Pillay was a conscientious, reliable and honest witness, who responded directly to questions, made appropriate concessions and was prepared to admit matters adverse to his case. I accepted Mr Pillay’s evidence.
Dr Tomar, in contrast, was not an impressive witness. As noted in detail below, he was frequently evasive or argumentative, and at some points implausibly professed a lack of recollection. While Dr Tomar initially made some significant admissions adverse to his case, he subsequently attempted unconvincingly to retract them. Dr Tomar maintained inconsistent assertions, at points clearly recognising the company’s status as a separate legal entity while at other times professing to recognise no distinction between the company and the wider Ananda Marga movement.
Dr Tomar was the only defendant who gave evidence, although he acknowledged that most defendants were available to do so and some were present in court during the hearing. Dr Tomar stated that he chose not to call Dhruvananda to give evidence on behalf of the defendants.
Acarya Nityashuddhananda Avadhuta and Acarya Bhaveshananda Avadhuta, who gave evidence for the plaintiffs, were, in my opinion, direct and credible witnesses.
Dr Kohli, who gave evidence for the defendants, testified clearly, but in cross‑examination was discursive and frequently evasive. Dr Kohli was reluctant to concede matters adverse to the defendants’ case, and, as discussed below, did not present as a candid witness.
Acarya Svarupananda Avadhuta, who gave evidence for the defendants, was a very unsatisfactory witness. He had difficulties with hearing, reading and with understanding English, and after he had testified for some time, ultimately required an interpreter. Allowing for those problems, which were apparently beyond his control, Mr Svarupananda appeared evasive, argumentative and unable or unwilling to understand or to answer questions directly. I therefore accorded his evidence little weight.
Due to the time that has elapsed since the hearing of this matter and the publication of these reasons, I record that I formed and maintained my opinion of the above witnesses at the time of trial.
BACKGROUND FACTS
What is Ananda Marga?
It was common ground that Ananda Marga Pracaraka Samgha was founded in India in 1955 by Prabhat Ranjan Sarkar, who is known to adherents (and referred to in these reasons) as “the Founder”. “Ananda Marga” means “the Path of Bliss”, “Pracaraka” indicates “propagation” and “Samgha” denotes an organisation. Ananda Marga is described in the company’s memorandum as amended as “an autonomous religion, faith and social system based upon the teachings of the Founder and Preceptor of Ananda Marga, Shri PR Sarkar also known as Shrii Shrii Anandamurti”.
It was also common ground that the Founder of Ananda Marga wrote prolifically and published over 260 works, including a seminal, three‑part text or scripture known as “Carya Carya”, which was first published in India in April 1956. (The first English edition of Carya Carya Part I was published in 1962).
Carya Carya Part I commences with “The Supreme Command” which states, inter alia:
Those who perform sadhana twice a day regularly… their liberation is a sure guarantee. Therefore every Ananda Margi will have to perform sadhana twice a day invariably; verily is this the command of the Lord. … It is the bounden duty of every Ananda Margi to endeavour to bring all to the path of bliss.
Part I of Carya Carya otherwise deals, broadly speaking, with ritual and conduct (including ceremonies for naming infants, marriage, initiation in yoga and appropriate dress) and “social punishment”. It also prescribes a bureaucratic organisation (including boards, committees and their members and officers) relevant to this case.
Carya Carya Part II deals with moral precepts and instructions. Carya Carya Part III deals with yoga and meditation.
It was common ground that an elaborate, multi‑tiered organisation based on Carya Carya was established in India during the Founder’s lifetime. The organisation includes a large number of committees and boards expressly referred to in Carya Carya Part I, which exercise different authority and perform different functions at a number of descending levels. The highest governing bodies based in India include a legislative‑like body called the Central Committee, which is elected every five years by the purodhas (persons of the highest spiritual rank) of Ananda Marga, and a Central Executive Committee, the members of which are appointed from Central Committee members by a President. The President is typically also the head purodha (known as the Purodha Pramukha) and may appoint three persons from outside the Central Committee, which also has a five year term.
The organisation has 42 departments which operate under, and the heads of which are drawn from, the Central Executive Committee. Each of the 42 departments has a board, which may be either an ACB (general board) or named after the department involved.
Carya Carya Part I also refers to a body called the Central Purodha Board, which, in the event of any complicated problem or serious controversy, makes “supreme” decisions which are binding on “the Society” or Ananda Marga followers. The decisions of the four‑member Central Purodha Board are arrived at by majority vote. If the votes are evenly split, the Chairperson, who is the Purodha Pramukha (the highest ranking office holder in the Ananda Marga organisation) has the casting vote. The Purodha Pramukha, who holds office for life, is elected by the purodhas. The purodhas also elect the other three members of the Central Purodha Board who ordinarily hold office for five years. The Founder, who was the original Purodha Pramukha, held that office until his death in 1990.
According to Carya Carya, the Purodha Pramukha’s powers include appointing the Central Executive Committee and casting a decisive vote in the case of a split in the Central Purodha Board. The Purodha Pramukha also confirms the decisions of the Central Acarya Board, the Central Tattvika Board and the Avadhuta/ika Avadhuta Board, (discussed below).
Ananda Marga has both monastic and non‑monastic followers. Monks and nuns undergo a course of training which culminates in an examination and lay adherents may undergo initiation in a process of meditation known as “Sadhana.”
Adherents of Ananda Marga may acquire the spiritual ranks or titles of purodha, tattvika, acarya or avadhuta. While both monks and nuns and non‑monastic “wholetimers” (full time workers) may acquire spiritual titles, certain titles are reserved for monastic adherents.
In addition to the Central Purodha Board, Carya Carya also refers to a Central Acarya Board, consisting of eight members elected by the acaryas, which decides “all rules and regulations, punishment, discipline and everything else regarding acarya/as”, subject to the Purodha Pramukha’s final approval. A Central Tattvika Board, comprising 12 persons elected by the tattvikas, decides on the punishment of and all matters regarding tattvikas, subject to final approval by the Purodha Pramukha. An Avadhuta/ika and Avadhuta Board, comprising four persons elected by the Avadhuta/ikas, decides on the punishment of and all matters regarding Avadhuta/ikas, subject to the final approval of the Purodha Pramukha.
Chapter 30 of the Carya Carya deals with “social punishment”. It provides that “anybody having committed an antisocial act will have to undergo a severe fast or punishment of any other type prescribed by an acarya for the atonement of the sin”.
Chapter 30 further provides that any allegation against the conduct of an Ananda Margi is to be brought to the notice of the person’s acarya/as or, if that acarya/as is absent, to another acarya/as with relevant responsibility. If the latter is not readily available the accusation should be taken to either of two other office holders, who will form a tribunal of acarya/as. If the tribunal finds that the allegation is made out the accused can appeal to another office holder, who will form another tribunal of acarya/as, from which the accused, if unsatisfied, may (with that tribunal’s permission) appeal to the General Secretary of the Samgha. The decision of the General Secretary or a tribunal he appoints is taken to be final.
Chapter 30 of Carya Carya provides that where a “family acarya” is accused, a tribunal appointed by the secretary of the Central Acarya Board will decide the punishment. In the case of a non‑acarya “wholetimer”, a tribunal appointed by the head of the relevant wing of Ananda Marga will decide the punishment. In the case of a “wholetimer” who is an acarya, the punishment is decided by a tribunal appointed by the secretary of the Central Acarya Board or the head of the relevant wing. In the case of a “wing-head”, the General Secretary of the Samgha or an appointed tribunal will decide the punishment.

In summary, Carya Carya identifies the General Secretary as the person to whom a lay follower may (with a tribunal’s permission and at the accused’s option) appeal, and who is the decision‑maker only in the case of a wing-head. Further, social punishment is imposed for an “antisocial act”, which is not defined.
While the Purodha Pramukha has the decisive power in the case of a split vote of the Central Purodha Board, it is only in relation to “any complicated problem or serious controversy in Ananda Marga”.
Carya Carya Part II contains mandatory duties of Ananda Marga, which include charitable deeds, charitable thoughts and care of others. It contains rules about society, including service to others. It also contains a series of rules or precepts including “The Fifteen Rules of Behaviour” or “Shilas” on which the defendants relied, as follows:
(1)Forgiveness.
(2)Magnanimity of mind.
(3)Perpetual restraint on behaviour and temper.
(4)Readiness to sacrifice everything of individual life for Ideology.
(5)All-round self-restraint.
(6)Sweet and smiling behaviour.
(7)Moral courage.
(8)Setting an example by individual conduct before asking anybody to do the same.
(9)Keeping aloof from criticizing others, condemning others, mudslinging and all sorts of groupism.
(10)Strict adherence to the principles of Yama and Niyama.
(11)Due to carelessness, if any mistake has been committed unknowingly or unconsciously, one must admit it immediately and ask for punishment.
(12)Even while dealing with a person of inimical nature, one must keep oneself free from hatred, anger and vanity.
(13)Keeping oneself aloof from talkativeness.
(14)Obedience to the structural code of discipline.
(15)Sense of responsibility.
The Fourteen Point Conduct Rules for Wholetime Workers, on which the defendants also relied, include the following rules:
2 No logic, no reasoning but the compliance of order.
3You will have to reach at the appointed time when you have been called for, without fail, if you are not dead.
There is also a parallel structure throughout the world to the Ananda Marga organisation in India, as Ananda Marga is organised into nine geographical sectors. The Ananda Marga sector incorporating Australia is known as the Suva Sector. The structure of each geographical sector replicates that of the organisation in India, with a Sectorial Executive Committee (“SEC”), a Sectorial Secretary, 42 departments and 42 boards. Ideally, each sector should include further tiers of 42 boards at descending regional and diocesan levels, albeit in practice there may not be enough persons to establish them. Each department in the sectors has a secretary or head, who is a member of the SEC.
The evidence established that the elaborate organisation described in Carya Carya and known as Ananda Marga Pracaraka Samgha (frequently contracted to “AMPS”) is not incorporated and has no legal personality separate from that of the persons from time to time involved or holding office in it.
While the defendants designated the unincorporated organisation which operates in India, “AMPS Central”, that designation was not derived from Carya Carya or established by any other formal document.
The West Bengali Society, also known as Ananda Marga Pracaraka Samgha (which, confusingly, was also frequently referred to as “AMPS”), was first registered in Bihar, India in 1955. It was subsequently registered in West Bengal in 1964 pursuant to West Bengali legislation. Although the registered West Bengali Society is not referred to in Carya Carya, it was not disputed that the Founder approved its constitution. While the West Bengali Society is not a corporation, the West Bengali Act under which it is registered confers characteristic features of legal personality, such as perpetual succession, the capacity to hold property through its governing body and to sue and be sued.
The West Bengali Society has, under its constitution, a governing body known as a Central Committee, consisting of between 10 and 15 members (including the Founder during his lifetime and another foundation member), together with the persons elected by the members of the Society, whose membership qualifications include initiation into “Sadhana”, being 18 years old or over and following the principles of social and spiritual conduct laid down in Carya Carya. The office‑bearers include a President, General Secretary and Treasurer who are elected by the governing body from amongst themselves.
The governing body has management powers and its decisions are made by a majority vote. The President has a casting vote, the power to nominate members of the Executive Committee, to exercise the powers of the committees established under the regulations and to advise the Society on all points of disputes.
The General Secretary is (subject to the provisions of the West Bengali Act, the relevant regulations and the control of the governing body) empowered, inter alia, to convene meetings, issue notices, maintain minutes books, function as head of the Executive Committee, appoint various secretaries, and bring and defend litigation on behalf of the Society. The General Secretary may also (with the approval of the President) remove or suspend members of the Society for violation of the code of conduct, orders or directions.
In 1972, the Founder sent a missionary and Sectorial Secretary to Australia in the Sydney Sector (now called the Suva Sector) to propagate and teach Ananda Marga.
On 1 October 1974, an unincorporated association known as Ananda Marga Pracaraka Samgha (NSW) was established in New South Wales. In 1974 and 1978, Ananda Marga associations were also registered in Western Australia and South Australia.
In 1981, Mr Pillai became an Ananda Marga follower.
On 17 September 1984, with the approval of the Founder, amendments to the constitution of the West Bengali Society in India were made and registered.
On 25 November 1986, the company was registered in New South Wales. Between 1986 and 1989, it was also registered in Victoria, Queensland and Western Australia.
In 1988, Mr Pillay became an Ananda Marga monk.
On 21 October 1990, the Founder of Ananda Marga died and was succeeded as Purodha Pramukha by Acarya Shraddhananda Avadhuta.
In 1991, Dr Tomar commenced training as an Ananda Marga monk, which he completed in 1994.
In 1992, the constitution of the company was amended to refer to various Ananda Marga texts, including Carya Carya Parts I, II and III.
On 3 and 4 June 1995, the Central Committee of the unincorporated AMPS organisation in India passed as definitive the current sixth edition of Carya Carya Part I.
In around mid-1997, Mr Pillay was posted to work as the Melbourne Regional Secretary of AMPS and assumed his position in 1998. On 4 November 1998, by a posting order of the General Secretary of AMPS, Mr Pillay also became the Sectorial Inpro Secretary, Sectorial Farpro Secretary, Sectorial Eco-viability Secretary, Sectorial AMURT-coordinator and Sectorial Construction Secretary of the Suva Sector.
From August 1999 to February 2001, Dr Kohli held office as the General Secretary of “AMPS”.
On 14 September 2000, the company’s trade mark “ANANDA MARGA” was registered by the Registrar of Trade Marks.
On 16 September 2000, Dr Tomar arrived in Australia.
On 7 February 2001, Dhruvananda was elected General Secretary of the unincorporated organisation in India. The validity of his election on that occasion was undisputed.
On 7 May 2001, Messrs Pillai and Robins and Ms Alister became members and directors of the company.
In 2001, Mr Robins became the secretary of the company.
On 25 November 2002, Ms Nayak became a member and director of the company.
In 2003, Mr Pillay became the Public Relations Secretary (which includes the office of Legal Secretary) of AMPS in the Suva Sector.
On 13 August 2003, Mr Pillay became a member and director of the company.
On 3 October 2003, Dr Tomar became a member and director of the company.
It was common ground that during the life of the Founder and for about a decade thereafter, Ananda Marga had a unified organisation and administrative structure. Broadly speaking, the organisation, bodies, committees and boards under Carya Carya, discussed above, functioned (although there was, for example, no Central Committee until after the Founder’s death). The adherents of Ananda Marga were not in dispute over the legitimacy of any Ananda Marga body, committee, organisation or office holder in India or elsewhere.
Following a series of incidents, from late 2002 to 2003 disputes and divisions appeared in the unincorporated Ananda Marga organisation in India. From 2003, the validity of the election of office holders in the West Bengali Society was also disputed and different claimants for the offices of General Secretary and President in that body appeared. Competing Ananda Marga administrations based in Ranchi and Kolkata (Calcutta) India began to emerge.
In September 2003, following an election of the Central Committee in the unincorporated Ananda Marga organisation in India, Dhruvananda expelled 15 people from the governing committee of the West Bengali Society and the Central Committee of the unincorporated body. Dhruvananda also cancelled the religious titles of about 30 supporters of the 15 people. The validity of the expulsions and cancellation of religious titles was challenged on the ground of denial of natural justice.
On 11 July 2004, Mr Pillai became the President of the company.
On 9 July 2004 at an Ananda Marga retreat, the meeting of lay members and local wholetimers in the Suva Sector, in response to the divisions that had emerged in Ananda Marga, passed the following resolution:
We the undersigned respectfully request that the SEC, the ACB and the National Board accept the following:
That we will not participate in or support any sectarian activity within Ananda Marga Pracaraka Samgha in or outside the sector;
That henceforth all instructions from Central authorities will be carefully scrutinised by all the appropriate sectorial bodies;
That only those central instructions which are deemed to be in the greater universal interest of the organisation and of the sector be recognised and follows;
We clearly and unequivocally stress that this action does not give recognition or credence to any break away group or parallel organisation or structure and it is not motivated by any group’s sentiment.
At the same retreat, members of the monastic order (including Dr Tomar and Mr Pillay) passed a separate resolution (“Suva Sector resolution”) to the same effect, as follows:
We do not participate in or support any sectarian activity within Ananda Marga Pracaraka Samgha in or outside the sector;
Henceforth all instructions from Central authorities will be carefully scrutinised by our sector’s administration, and only those deemed to be in the greater universal interest of the organisation and of the sector, shall be recognised and followed;
We clearly and unequivocally stress that this action does not give recognition or credence to any break away group or parallel organisation or structure and it is not motivated by any group’s sentiment;
This decision will stand until - in the opinion of the majority of margiis, LFT and WT workers of Suva sector - a satisfactory process is in place for:
(i) the depoliticisation of the organisation;
(ii)reclaiming the trust in and respect for the structure;
(iii)establishment of a fair and transparent administration;
(iv)ensuring that the organisation does actually reflect the aims and values of the mission of Ananda Marga.
On 11 July 2004, the company at a special general meeting unanimously resolved that the board would offer its support for the Suva Sector resolution, as follows:
Mr Pillai proposed that the board offer its support for the Suva Sector resolution of 9 July 2004, which was read out during the meeting. Mr Pillay seconded the motion which was passed unanimously.
On 16 July 2004, the SEC passed the Suva Sector resolution.
In 2005, Mr Pillay helped to formulate a proposal to resolve the conflict in Ananda Marga through the Central Purodha Board. He arranged a conference of Ananda Marga wholetimers from both “camps” to discuss unity, which was ultimately unsuccessful. The Ranchi administration expelled 15 persons who attended the conference.
In November 2007, two elections for the Ananda Marga Central Committee were held. First, an election was held in Ranchi to which only 21 purodhas were invited. By that time, a considerable number of persons had been either expelled from offices to which they were elected in the uncontroversial 2002 election or had been deprived of their Ananda Marga spiritual titles. Secondly, an election was held at Kolkata, to which many more purodhas (including those aligned to either Ranchi or Kolkata or who were unaligned) were invited.
In the two elections in November 2007, two different Central Committees were elected and subsequently two rival Ananda Marga administrations, both claiming legitimacy under Carya Carya, were formed and operated from Ranchi and Kolkata respectively. Each denied the legitimacy of the other administration.
The validity of the elections and appointments conducted by the Ranchi administration was challenged in various Indian courts on grounds including the lack of the requisite quorum and the illegitimate reduction of the electorates by the expulsions. The litigation, which is discussed in more detail below, is continuing and remains unresolved.
The rival administrations in India continue to assert competing claims to legitimacy and sole authority in Ananda Marga under Carya Carya and related writings and precepts. Some adherents of Ananda Marga worldwide recognise either the Ranchi or the Kolkata (now incorporated in the Unity) administration, while others profess allegiance to neither, or have only recently aligned with a particular administration.
At the commencement of this litigation, most persons on the plaintiffs’ register and some witnesses for the plaintiffs did not recognise either the Ranchi or Kolkata administration. Broadly speaking, they now recognise the “Unity” administration, which incorporated the Kolkata administration and is based in Kolkata. Dr Tomar and the majority of the defendants’ witnesses recognised the Ranchi administration. The alignment of the second to eleventh defendants cannot be known with certainty, as they did not give evidence.
The defendants contend that Dhruvananda, who heads the Ranchi administration, is the Acting Purodha Pramukha and the General Secretary of the West Bengali Society and the unincorporated organisation. The plaintiffs contend that Bhaveshananda, who belongs to the Unity administration, is currently the legitimate General Secretary of the West Bengali Society and the unincorporated organisation.
On 30 October 2005, by a posting order of Dhruvananda as the General Secretary of AMPS Central, Mr Pillay was posted as Regional Secretary, Dar Essalam, in the Nairobi Sector.
On 5 December 2005, by a posting order of Dhruvananda as the General Secretary of AMPS Central, Dr Tomar was appointed as Sectorial Secretary of the Suva Sector of AMPS.
On 4 June 2006, a group of Ananda Marga followers known as the Bali Margiis made a declaration (“Bali Margiis Declaration”) that they did not “accept the group-ism and disunity in the organisation … [or] recognise / accept the legitimacy of both administrations”. They further declared that any “order, transfer, posting etc” from any existing administration would not be accepted. The declaration was stated to continue in effect until there was only one united and inclusive organisation of Ananda Marga.
In April 2008, the SEC resolved to accept Mr Pillay as acting Sectorial Secretary of the Suva Sector, subject to review in six months. The SEC also passed the following resolution:
SEC hereby reasserts the Suva Sector Resolution of 9 July 2004 and furthermore we hereby declare a moratorium on all postings directed upon us from outside the sector.
By letters to Mr Pillay dated 8 July 2008, 11 September 2008 and 23 September 2008, Dhruvananda, as the General Secretary of AMPS Central, asserted that Mr Pillay had disobeyed the order posting him to the Nairobi Sector and asked why he should not be subject to disciplinary action.
By a letter to Dr Tomar dated 28 September 2008, Dhruvananda, as the General Secretary of AMPS Central, stated that Mr Pillay’s Tattvikaship, Acaryaship and Avadhutaship were suspended with effect from 30 September 2008.
On 15 October 2008, Acarya Shraddhananda Avadhuta died. On 28 October 2008 the Ranchi administration held an election at which Acarya Vishvadevananda Avadhuta was elected Purodha Pramukha.
On 3 December 2009, Mr Pillai was elected President of the company.
Immediately prior to 20 March 2010, all relevant parties accepted that the company had five directors (Messrs Pillay and Pillai and Ms Nayak, Ms Alister and Dr Tomar). There had previously been seven acknowledged directors, one of whom (Mr John Crowe) had died and one of whom (Mr Robins) had recently retired. At that time, it was assumed that all members were also directors and that the directorate and the membership completely coincided. At trial, however, it was not disputed that Mr Robins, when resigning as a director, took no steps to resign as a member. Further, on the basis of evidence at trial, the defendants asserted that the membership of other persons who were formerly directors of the company may not have terminated as had previously been assumed.
Following the resignation of Mr Robins as a director on 19 February 2010, Mr Pillay, who had been an additional secretary since 3 October 2003, became the sole company secretary. He then assumed responsibility for maintaining the company’s register of members, which was hitherto handled by Mr Robins and prior to Mr Robins’ incumbency by his predecessor, Robert Green, from April 1999 to May 2001.
In March 2010, Mr Pillay, a resident of Victoria, visited the company’s registered office in Katoomba, New South Wales and searched for its documents and records relating to membership and directors. The only register of members he found was in a red bound notebook. It consisted of only five handwritten names entered between 1986 and 1992.
Mr Pillay, having spoken to Mr Robins, updated the register of members to reflect his understanding of the company’s current membership, based on ASIC returns, the available documents (including minutes of meetings) and information from the previous secretaries. He was unable to locate any minutes of committee meetings or general meetings for the period from 1992 to 2000 (although subsequently, additional minutes were located). The updated membership register compiled by Mr Pillay is discussed further below.
In early 2010, Dr Tomar, assisted by Ms Alister, drew up a different membership register for the company, which included persons based on their membership of various Ananda Marga boards and committees. He completed the register on 25 February 2010.
On 25 February 2010, Dr Tomar caused notices of a general meeting to be held in Queensland on 20 March 2010 to be sent to persons on the defendants’ register and to Mr Pillay, Mr Pillai and Ms Nayak.
By an email to Mr Pillay dated 26 February 2010, Dr Tomar stated that he did not consent to conducting a committee meeting proposed for 1 March 2010 electronically. Dr Tomar attached a Notice of General Meeting for 20 March 2010 to vote on resolutions to remove Mr Pillay and Mr Pillai as directors of the company and to appoint Dr Tomar as President and Mr Pfeiffer as a director.
When Mr Pillay requested a copy of the register of members Dr Tomar had sent with the notice of meeting, Dr Tomar did not respond.
On 11 or 12 March 2010, Mr Pillay wrote to persons on his updated members’ register whose subscriptions were overdue advising them to contact him urgently, as the matter would be addressed by a committee meeting on 17 March 2010.

On 14 March 2010, Mr Pillay called a meeting of the committee for 17 March 2010 to deal with new applications for membership and to confirm his updated membership register.
The notice of meeting was as follows:
Two directors, Dr Tomar and Ms Alister, contended that the notice of the committee meeting for 17 March 2010 was inadequate.
The email of Cooper Grace Ward (solicitors then acting on behalf of Dr Tomar and Ms Alister) dated 16 March 2010 alleged that there was no reasonable notice, as Dr Tomar and Ms Alister received the notice of meeting on the evening of 14 March 2010, Ms Alister was in India and committee meetings were ordinarily by teleconference with 14 days notice. The email asserted that the notice did not clearly and fully state the nature of the business to be transacted or include the names of the applicants, their proposers and seconders.
On 17 March 2010, Mr Pillay, by email, maintained that the notice was valid and stated that although Dr Tomar had revoked his consent to a committee meeting by telephone the other directors would be happy if Dr Tomar and Ms Alister changed their minds and participated by telephone.
At the meeting on 17 March 2010, which Dr Tomar and Ms Alister did not attend, the committee (comprising Messrs Pillay and Pillai and Ms Nayak) admitted Messrs Largey and Tanner to membership and approved the register of members drawn up by Mr Pillay. Shortly after the meeting Mr Pillay added the names of Messrs Largey and Tanner to the register of members.
At the general meeting on 20 March 2010 called by Dr Tomar all the defendants attended either in person or by proxy. Among other things, resolutions were passed to remove Messrs Pillay and Pillai as directors.
The general meeting also resolved to appoint Dr Tomar as the President of the company, Mr Pfeiffer (the third defendant) as a director and Mr Tiwari (the fourth defendant), as company secretary. (The meeting of 20 March 2010 is discussed in detail in Ananda Marga Pracaraka Samgha Ltd v Tomar(No 2) [2010] FCA 1342].)
The company and Messrs Pillay and Pillai issued this proceeding on 29 March 2010. They challenged the validity of the proceedings at the meeting on 20 March 2010 and their consequent removal from office on a number of bases, including short notice, exclusion of legitimate members from the meeting, failure to comply with the requirement in art 19 of the company’s articles that the President preside and the attendance and voting by persons who were not legitimate members of the company.
On 31 March 2010, considering that there was a serious question to be tried and that the balance of convenience favoured the maintenance of the status quo, I injoined the defendants from, inter alia, calling meetings, operating company bank accounts and dealing with company properties. The plaintiffs, including the company, also undertook to observe a number of similar restrictions.
On 3 June 2010, pleadings were ordered (see Ananda Marga Pracaraka Samgha (ACN 003 193 897) v Tomar [2010] FCA 565) and the parties’ respective positions subsequently crystallised. The pleadings and the further affidavits filed in the proceeding disclosed a fundamental and far‑reaching dispute about the identity of the members and the directors of the company and the proper bases for determining those questions. The pleadings are discussed in, inter alia, Ananda Marga Pracaraka Samgha v Tomar (No 5) [2012] FCA 390.
On 3 December 2010, I granted the plaintiffs’ application to restrain the defendants from, inter alia, affixing or copying the company seal, collecting or diverting the company’s mail, using the company’s “mela” (festival) contact list, redirecting traffic from the company’s websites and interfering with or varying the company’s business or contracts (see Ananda Marga Pracaraka Samgha v Tomar (No 2) [2010] FCA 1324).
On 13 December 2010, I made the following orders for the interim management of the company pending the hearing and determination of the proceeding:
Until the hearing and determination of the proceeding or further order:
1.The parties shall not take any steps to add or remove any director or member of the company, or to alter the constitution of the company, as existing immediately prior to 20 March 2010, and shall not call or hold any meeting in relation to any such addition, removal or alteration.
2.The directors holding office immediately prior to 20 March 2010, being the second plaintiff (Devendhran Vadiveloo Pillay), the third plaintiff (Prabanjamurthi Pillai), the first defendant (Sunil Kumar Singh Tomar), the second defendant (Claudia Alister) and Arati Nayak, shall be taken to remain and shall be registered as the directors of the company.
3.Subject to the orders made and undertakings given on 31 March 2010 and the orders made on 3 December 2010, the power to manage the company shall vest in the Board and, in the absence of agreement, questions shall be determined by a majority of the directors. No single director shall have authority to exercise the management power unless it is delegated by a majority of the directors.
4.At least 7 days’ notice, accompanied by an agenda including a copy of the terms of any proposed resolution, shall be given of a directors’ meeting.
5.Directors’ meetings shall occur in person unless all directors unanimously agree otherwise.
6.The reasonable costs of directors’ attendance at directors’ meetings shall be paid by the company.
7.Subject to any entitlement the company may have to withhold information and/or documents from the defendants upon the grounds set out in paragraphs 6 and 7 of the plaintiffs’ submissions in reply dated 10 December 2010, and provided that nothing in this order shall entitle the defendants to redirect the company's mail in breach of paragraph 3(d) of the orders made on 3 December 2010, each of Devendhran Vadiveloo Pillay, Prabanjamurthi Pillai, Sunil Kumar Singh Tomar and Arati Nayak and Claudia Alister shall be entitled lawfully to receive information relating to the company, including financial records.
At a meeting on 17 January 2011, Mr Pillay was appointed Managing Director of the company.
Between 11 September and 13 September 2011, Dr Tomar received letters from the Secretaries of the Central Tattvika Board, Central Acarya Board and Avadhuta Board containing copies of their decisions to cancel the spiritual titles of Messrs Pillay, Largey and Robins and Ms Nayak and Ms Ajodha. On 19 September 2011, Dhruvananda, as the Acting Purodha Pramukha, approved those decisions.
THE COMPANY’S CONSTITUTION
The company was registered in New South Wales on 25 November 1986, as a company limited by guarantee. The company’s memorandum stated, inter alia, that:
2. The objects for which the company is established are:
a.To propagate the ideals, the philosophy and practice of ANANDA MARGA.
b.To carry out the objectives of the company through discourses, open addresses, personal contacts and through the medium of literature and such other means as may assist in the fulfilment of the objectives of “the company”.
c.To work for the development of a universal society and the welfare of all human beings through:
i.Social service.
ii.Relief work among suffering humanity.
iii.Primary, secondary and tertiary schools and pre-school facilities such as kindergartens and child-minding centres.
iv.Encouraging literacy and artistic faculties.
v.Homes for the aged and physically and mentally handicapped.
vi.Hospitals and other medical services.
vii.Spiritual, moral and cultural upliftment.
viii.Development of integrated human personalities embracing all spheres of life, social, individual and married.
ix.And such other means as may assist in the fulfilment of the above objectives.
d.To exert and expend all its resources for the purpose of expansion of the company, social services, and universal and world unity.
e.To provide all the above types of services without any form of discrimination based on race, religion or sex.
f.To hold or arrange competitions and provide or contribute towards the provision or (sic) prizes, awards and distinctions therewith.
g.To subscribe to, become a member of and cooperate with or amalgamate with any other registered or exempted charity whether incorporated or not, whose objects are similar to those of the company.
…
(k)To appoint, employ, remove or suspend such managers, clerks, secretaries, servants, workers and other persons as may be necessary or convenient for the purposes of the company.
In 1992, the memorandum was amended to amend the objects as follows:
1.Clause 2(a) be amended by deleting the full stop after the words "Ananda Marga" and adding the words "which is an autonomous religion, faith and social system based upon the teachings of the Founder and Preceptor of Ananda Marga, Shri P.R. Sarkar, also known as Shrii Shrii Anandamurtii. The religious doctrine, faith, moral canons and creed of Ananda Marga being contained in the scriptures given by the Founder including but not limited to: The Supreme Command, Ananda Sutram, Guide to Human Conduct, Subhasita Samgraha and Ananda Marga Carya Carya I, II and III. The Articles of Faith, and religious doctrines of Ananda Marga are:
i.The belief in One, Infinite, Supreme Entity which in the Sanskrit language is referred to as Parama Purusa.
ii.The belief that through the twice daily practice of Ananda Marga meditation the Supreme, Infinite Being may be fully and personally realised by the individual.
iii.Meditation and hence realisation of the Supreme, Infinite Being is dependent upon the proper application of cardinal moral principles (Yama and Niyama) in the individual's life.
iv.It is a duty of the highest order to encourage all persons to practice Ananda Marga meditation and to follow a life of virtuous and righteous conduct.
v.Engaging in selfless, humanitarian service dedicated to the relief of human suffering whether it be physical, mental, or spiritual is indispensable in the individual's progress toward the realisation of the Supreme, Infinite Entity".
2.Clause 2(c) be amended by deleting clause 2(c)(ix) and inserting after clause 2(c)(viii) the following words:
"(ix) Conducting the religious functions of Ananda Marga including collective meditation services, marriages, baby namings, funerals, and religious holidays.
(x) Providing for the training, ordination and ongoing maintenance of religious ministers of Ananda Marga for the purposes of instruction and guidance of members in the doctrines, faith, and practices of Ananda Marga.
(xi) And such other means as may assist in the fulfillment of the above objectives."
…
4.That clause 3 be amended by adding at the end of the clause after the words "any share of profits he/she may receive in respect of such payment." the following words:
"Provided further that nothing herein shall prevent the company from fulfilling its fiduciary, equitable and legal duties and obligations in relation to property and any income therefrom that it holds as custodian trustee or otherwise on trust for any person, association, institution, venture or enterprise, whether incorporated or unincorporated."
…
The company’s articles relevantly state:
MEMBERSHIP
3.The subscribers to the memorandum of association and such other persons as the Committee shall admit to membership in accordance with these articles shall be members of the company.
4.Every applicant for membership of the company (other than the subscribers to the Memorandum of Association) shall be proposed by one and seconded by another member of the company to both of whom the applicant shall be personally known. The application for membership shall be made in writing, signed by the applicant and his proposer and seconder and should be in such form as the Committee from time to time prescribes.
5.At the next meeting of the Committee after the receipt of any application for membership, such application shall be considered by the Committee, who shall thereupon determine upon the admission or rejection of the applicant. In no case shall the Committee be required to give any reason for the rejection of an applicant.
6.When an applicant has been accepted for membership the Secretary shall forthwith sent to the applicant written notice of his acceptance and a request for payment of his entrance fee and first annual subscription. Upon payment of his entrance fee and first annual subscription the applicant shall become a member of the company, provided nevertheless that if such payment be not made within two calendar months after the date of the notice, the Committee may in its discretion cancel its acceptance of the applicant for membership of the company.
7.The entrance fee and annual subscription payable by members of the company shall be such as the company in general meeting shall from time to time prescribe, provided that until the company shall otherwise resolve the entrance fee shall be $5.00 and the annual subscription shall be $5.00.
8.All annual subscriptions shall become due and payable in advance on the 1^st day of July in every year.
CESSATION OF MEMBERSHIP
9.If the subscription of a member shall remain unpaid for a period of two calendar months after it become due then the member may after notice of the default shall have been sent to him by the secretary or Honorary Treasurer be debarred by resolution of the Committee from all privileges of membership provided that the Committee may reinstate the member on payment of all arrears if the Committee thinks fit to do so.
10.A member may at any time by giving notice in writing to the Secretary resign his membership of the Company but shall continue liable for any annual subscription and all arrears due and unpaid at the date of his resignation and for all other moneys paid by him to the company and in addition for any sum not exceeding 5 dollars for which he is liable as a member of the company under clause 6 of the memorandum of association of the company.
11.If any member shall wilfully refuse or neglect to comply with the provisions of the memorandum or articles of association of the company or shall be guilty of any conduct which in the opinion of the Committee is un‑becoming of a member or prejudicial to the interest of the company the Committee shall have power by resolution to censure fine suspend or expel the member from the company.
Provided that at least one week before the meeting of the Committee at which such a resolution is passed the member shall have had notice of such meeting and of what is alleged against him and of the intended resolution and that he shall at such meeting and before the passing of such resolution have had an opportunity of giving or in writing any explanation or defence he may think fit and provided further that any such member may by notice in writing lodged with the Secretary at least twenty-four hours before the time for holding the meeting at which the resolution is to be considered by the Committee, elect to have the question dealt with by the company in general meeting and in that event an extra‑ordinary general meeting of the company shall be called for the purpose and if at the meeting such a resolution be passed by a majority of two-thirds of those present and voting (such a vote to be taken by ballot) the member concerned shall be punished accordingly and in the case of a resolution for his expulsion the member shall be expelled.

…
38.The office of a member of the Committee shall become vacant if the member-
(a)becomes bankrupt or makes any arrangements or composition with his creditors generally.
(b)becomes prohibited from being a director of a company by reason of any order made under the Code;
(c)ceases to be a member of the Committee by operation of Section 226 of the Code;
(d)becomes of unsound mind or a person whose person or estate is liable to be dealt in any way under the law relating to mental health;
(e)resigns his office by notice in writing to the Company;
(f)for more than six months is absent without permission of the Committee from meetings of the Committee held during that period;
(g)holds any office of profit under the Company;
(h)ceases to be a member of the company; or
(i)is directly or indirectly interested in any contract or proposed contract with the company. Provided always that nothing in this paragraph shall affect the operation of clause 3 of the memorandum of association of the Company.
…

49The Committee may delegate any of its powers and or functions (not being duties imposed on the Committee as the directors of the company by the Code or the general law) to one or more sub‑committees consisting of such member or members of the company as the Committee thinks fit. Any sub‑committee so formed shall conform to any regulation that may be imposed by the Committee and subject thereto shall have the power to co‑opt any member or members of the company and all members of such sub‑committee shall have one vote.
50The Committee may appoint one or more advisory boards consisting of such member or members of the Committee as the Committee thinks fit. Such advisory boards shall act in an advisory capacity only. They shall conform to any regulations that may be imposed by the Committee and subject thereto shall have power to co‑opt any member or members of the company and all members of such advisory boards shall have one vote.
CONSTRUCTION OF THE CONSTITUTION
The defendants’ contentions
The defendants’ case on membership, oppression and winding up all depended at least in part on their construction of the company’s objects.
In their further amended cross‑claim filed 4 November 2011, the defendants alleged that the articles and memorandum contained the following implied terms:
10.In the alternative, it is an implied term of the Articles and the Memorandum that:
(a)a person shall not be or remain a member of the company if that person is not a member of Ananda Marga in good standing (being a member of Ananda Marga who is in compliance with the rules and practices of Ananda Marga as pleaded in paragraphs 4, 5, 7, 8 and 23(c) of this cross-claim);
(b)a person shall not be or remain a director of the company if that person is not a member of Ananda Marga in good standing (being a member of Ananda Marga who is in compliance with the rules and practices of Ananda Marga as pleaded in paragraphs 4, 5, 7, 8 and 23(c) of this cross-claim);
(c)a person shall not be or remain a Company Secretary of the company if that person is not a member of Ananda Marga in good standing (being a member of Ananda Marga who is in compliance with the rules and practices of Ananda Marga as pleaded in paragraphs 4, 5, 7, 8 and 23(c) of this cross-claim);
(d)the assets of the company shall not be used in a manner that is contrary to or inconsistent with the lawful directions of AMPS Central or contrary to the disciplines and directives of AMPS Central; and
(e)the directors of the company shall not treat the assets of the company as if they were beneficially owned by the company or as if they were available to satisfy the personal wishes or financial interests of the directors themselves.
Neither the memorandum nor the articles contain an express term that:
(a)a member of the company must be a “member” or follower of Ananda Marga, whether in good standing or at all;
(b)a person’s membership of the company will terminate if he or she loses “good standing” as a member of Ananda Marga. (There is no reference to the latter concept nor any indication of its meaning);
(c)members of the company must obey the orders of, or remain in good standing with, any authority or office holder within the Ananda Marga religion or global organisation; and
(d)the company itself must use its assets consistently with the disciplines and directives of AMPS Central. (There is no reference to AMPS Central or to any requirement that the company comply with its directives or those of any other external authority.)

The letters stated:
This is to inform you that your subscription for Ananda Marga Pracaraka Samgha remains unpaid. Please contact me urgently to bring this up to date.
Please be advised that the committee will address the matter of unpaid subscriptions in the next committee meeting.
Mr Pillay posted the letters himself to each person’s last known address. In cross‑examination, he acknowledged that the Australia Post customer receipts for the letters were stamped 12 March 2010.
Mr Pillay stated that he received letters marked “Back to sender” or similar on various days leading up to the meeting. He was extensively cross‑examined on when the returned letters were received. At trial, Mr Pillay produced six returned envelopes of the registered mail he had posted to Ranu Das, David Hanson, Kakoli Roffe, Sarva Dutta, George Pathos and Henry Swan.
Mr Pillay sent the letter to Kakoli Roffe at the address of the Women’s Department School, although he knew at the time that she did not live there. He could not recall whether he researched where Kakoli Roffe lived prior to sending the letter. The two letters he sent to the school were physically handed back to him by a nun.
Mr Pillay sent three letters to the Ananda Marga registered office at 19 Lovel Street, Katoomba. He did not know the addressees, Sarva Dutta, George Pathos and Henry Swan, and was aware that they did not live at the address, which was shown in the records kept by ASIC. He did no further research at the time, but believed that someone living at the Katoomba office would know who and where the addressees were. Mr Largey, who resided at the Katoomba office, returned the three letters to him by post. They bore a date stamp of 16 March 2010, apparently applied by Australia Post.
Mr Pillay initially testified that the letters he produced were originals, but then conceded that they had never been folded and that some were copies. He did not have copies of all the letters he had sent. Initially, Mr Pillay stated that he was uncertain whether he received some returned letters after the meeting, but ultimately maintained that (save for the two letters handed to him from the Fitzroy School) he did not receive them back before the 17 March 2010 meeting. If his letters were returned to sender or the addressees did not respond, Mr Pillay listed them as removed.
As the defendants submitted, the notice informing the relevant members, while on the corporate letterhead, did not specifically identify the company or state the quantum of subscriptions which remained unpaid. The resolution passed at the 17 March 2010 meeting did not, in terms, debar the relevant party from all privileges of membership in accordance with art 9.
Nevertheless, the addressees had played no part in the company’s affairs for some time. Their membership was universally assumed to have terminated long ago. They had not been accorded, or attempted to exercise, any privileges of membership for years. Their communication with the company had long since ceased, and many, who were entirely unknown to the secretary, had failed to provide the company with any current address. By the time of trial, none of the persons to whom notices were directed had contacted Mr Pillay. There was no indication that they sought to maintain the privileges or status of a member of the company.
In the circumstances, where no period of notice is specified in art 9 and the relevant member has no right of appearance at the committee meeting, I am not persuaded that the resolution passed at the committee meeting on 17 March 2010 to accept as accurate a membership register on which the relevant persons did not appear as current members was invalidated due to insufficient notice.
Nor, in my view, did the form of the resolution invalidate it. The effect of the resolution was to remove the affected persons as members, but art 9 contemplates that result. Debarment from all membership privileges amounts to a cessation of membership. A “reinstatement” of the member is accordingly required should the committee so exercise its discretion. In my opinion, the committee could properly approve the updated membership list as accurate, albeit persons thereby removed as members might seek reinstatement on payment of arrears.
WHETHER COMPANY SHOULD BE WOUND UP ON THE JUST AND EQUITABLE GROUND
At trial, the defendants submitted that if they were unsuccessful in their contentions on membership and oppression, the company should be wound up pursuant to s 461(1)(k) of the Act on a number of bases, some of which were also advanced to support winding up or other relief sought for oppression. In support of an order for winding up under s 461(1)(k), the defendants also relied on numerous ongoing failures by the company and its directors to comply with the requirements of the Act which had emerged from the evidence, including the failure to keep an updated and accurate members’ register, the failure consistently to take or preserve minutes of meetings, the signing of returns to ASIC containing inaccuracies by Messrs Robins, Pillay or Pillai or Ms Nayak or others, and the failure to hold annual general meetings as and when required.
Section 467 of the Act provides:
467 Court’s powers on hearing application
(1)Subject to subsection (2) and section 467A, on hearing a winding up application the Court may:
(a)dismiss the application with or without costs, even if a ground has been proved on which the Court may order the company to be wound up on the application; or
(b)adjourn the hearing conditionally or unconditionally; or
(c)make any interim or other order that it thinks fit.
(2)The Court must not refuse to make a winding up order merely because:
(a)the total amount secured by one or more security interests in the property of the company is equal to or greater than the value of the property subject to the interest (or interests); or
(b)the company has no property.
(3)The Court may, on the application coming on for hearing or at any time at the request of the applicant, the company or any person who has given notice of intention to appear on the hearing of the application:
(a)direct that any notices be given or any steps be taken before or after the hearing of the application; and
(b)dispense with any notices being given or steps being taken that are required by this Act, or by the rules, or by any prior order of the Court; and
(c)direct that oral evidence be taken on the application or any matter relating to the application; and
(d)direct a speedy hearing or trial of the application or of any issue or matter; and
(e)allow the application to be amended or withdrawn; and
(f)give such directions as to the proceedings as the Court thinks fit.
(4)Where the application is made by members as contributories on the ground that it is just and equitable that the company should be wound up or that the directors have acted in a manner that appears to be unfair or unjust to other members, the Court, if it is of the opinion that:
(a)the applicants are entitled to relief either by winding up the company or by some other means; and
(b)in the absence of any other remedy it would be just and equitable that the company should be wound up;
must make a winding up order unless it is also of the opinion that some other remedy is available to the applicants and that they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy.
(5)Notwithstanding any rule of law to the contrary, the Court must not refuse to make an order for winding up on the application of a contributory on the ground that, if the order were made, no property of the company would be available for distribution among the contributories.
(7)At any time after the filing of a winding up application and before a winding up order has been made, the company or any creditor or contributory may, where any action or other civil proceeding against the company is pending, apply to the Court to stay or restrain further proceedings in the action or proceeding, and the Court may stay or restrain the proceedings accordingly on such terms as it thinks fit.
The particular non-compliances on which the defendants relied were set out in their written submissions as follows:
a.Failing to maintain a register of members as required by s 168 of the Corporations Act;
b.In breach of s 250N(2) of the Corporations Act, failing to hold Annual General Meetings at all in respect of the years ending 31st January 2001, 2002, 2003, 2004, 2005 and 2008;
c.Filing returns with ASIC falsely stating that Annual General Meetings had been held;
d.Holding an Annual General Meeting for the year ended 31st January 2006:
i.Which was not held within 5 months of the end of its financial year as required by s 250N(2) of the Corporations Act;
ii.At which the directors did not lay before the meeting the financial report as required by s 317 of the Corporations Act;
iii.At which the directors did not lay before the meeting the directors’ report as required by s 317 of the Corporations Act;
iv.At which the directors did not lay before the meeting the auditor’s report as required by s 317 of the Corporations Act.
e.Holding an Annual General Meeting for the year ended 31st January 2007:
i.Which was not held within 5 months of the end of its financial year as required by s 250N(2) of the Corporations Act;
iiAt which the directors did not lay before the meeting the financial report as required by s 317 of the Corporations Act;
iii.At which the directors did not lay before the meeting the directors’ report as required by s 317 of the Corporations Act;
iv.At which the directors did not lay before the meeting the auditor’s report as required by s 317 of the Corporations Act.
f.Holding an Annual General Meeting for the year ended 31st January 2008:
i.Which was not held within 5 months of the end of its financial year as required by s 250N(2) of the Corporations Act;
ii.At which the directors did not lay before the meeting the financial report as required by s 317 of the Corporations Act;
iii.At which the directors did not lay before the meeting the directors’ report as required by s 317 of the Corporations Act;
iv.At which the directors did not lay before the meeting the auditor’s report as required by s 317 of the Corporations Act.
g.Holding an Annual General Meeting for the year ended 31st January 2009:
i.Which was not held within 5 months of the end of its financial year as required by s 250N(2) of the Corporations Act;
ii.At which the directors did not lay before the meeting the financial report as required by s 317 of the Corporations Act;
iii.At which the directors did not lay before the meeting the directors’ report as required by s 317 of the Corporations Act;
iv.At which the directors did not lay before the meeting the auditor’s report as required by s 317 of the Corporations Act.
h.Failing in any year to make a directors’ report in accordance with a resolution of directors, as required by s 298(2) of the Corporations Act.
i.Filing returns with ASIC for each financial year falsely stating that the directors’ report was made in accordance with a resolution of directors;
j.Filing returns with ASIC for each financial year falsely stating that the directors’ report was signed in accordance with a resolution of directors;
k.Failing in any year to file returns with ASIC within 4 months of the end of the financial year as required by s 319(3) of the Corporations Act.
The defendants submitted that:
8.The first consequence of this sustained non-compliance is that the records of the company cannot be relied upon in relation to the questions before the Court, particularly the question of membership.
9.The non-compliance gives rise to the overwhelming conclusion that the company, under the control of the Second and Third Plaintiffs, is dysfunctional.
…
113.Notice of an AGM is fundamental to the functioning of a company, particularly as AGMs should be the meetings at which directors and office bearers are elected. There is no application under s 1322(4) of the Corporations Act to declare such meetings valid retrospectively. Such a declaration could not validly be granted in any event in the absence of notice to the persons affected thereby. The criteria set out in s 1322(6) of the Corporations Act are not capable of being made out, even if such an application were to be made.
114.The effect of this is that there has been no properly constituted AGM for a period of 10 years.
115.It is in any event clear that at no AGM have the accounts of the company for the appropriate year been considered, and in many cases accounts were not considered at all. Directors’ reports were never considered.
The defendants submitted that the evidence also established that major decisions about the company’s finances were taken by persons who were not members of and did not report to the board, and that the company informed authorities that Ananda Marga was a religion although a majority of directors believed the contrary.
The defendants also submitted that the company should be wound up because it was practically impossible for it to carry out its activities due to “the bifurcation” of the committee, which could not be remedied by a resolution of the members. The defendants submitted that the substratum of the company had failed, as it was formed to embody the Australian expression of a single Ananda Marga organisation. A split in the wider organisation and divided allegiance was not contemplated, but two administrations in India now claimed legitimacy and the company’s members were split over which administration it should recognise.
The defendants submitted that there was uncertainty as to who the members of the company are and the legally recognised Ananda Marga administration in India did not wish the company to continue to operate under its present control. There was also oppression by those controlling the company, constituted by the exclusion of Dr Tomar and Ms Alister from management and the continuing service of persons stripped of their spiritual titles.
The defendants submitted that conduct of the company would necessarily be affected by the fact that those on the plaintiffs’ register recognised a different administration from Dr Tomar and Ms Alister. The identity of the body to which the company paid dues was an important matter, which should be determined in accordance with the objects.
Further, the defendants submitted that the company’s sponsorship of workers to enter Australia under Australian migration laws would also be affected. The composition of the committee, which was traditionally affected by the posting of wholetimers into and outside the country would be influenced by the recognition of one administration rather than the other. If half the committee recognised posting orders from Kolkata, and the other half recognised orders from Ranchi, there would be uncertainty and conflict as to the committee members.
The defendants submitted that the company’s rights to its trade mark registered on the basis of representations by AMPS Central could be jeopardised if the controlling directors of the company no longer recognised AMPS Central.
The defendants submitted that the present case was closely analogous to British‑Israel. In that case, divisions arose in an Australian company limited by guarantee, an object of which was to cooperate with a London‑based body as the “headquarters” organisation of the British-Israel movement (a Christian group holding that Anglo Saxon Celts were descended from the lost 10 tribes of Israel). The London body had rights to surplus assets on the company’s winding up. The company described itself as “a branch” of the London body, although it was not in fact a subsidiary.
Following disagreement over the conduct of the company’s affairs, the members split into two factions with opposing views, headed by Mr Gregor and Mr Palmer respectively.
The Palmer group purported to expel the Gregor group (which froze the company’s bank accounts) and both groups claimed to be the legitimate board of the company. The London body, which opposed the Palmer group’s control, withdrew its affiliation. Mr Gregor, supported by the London body, applied to wind the company up on the just and equitable ground.
Austin J discussed the authorities on the just and equitable ground including Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 (“Ebrahimi”); (1972) 2 All ER 492 and International Hospitality Concepts Pty Ltd v National Marketing Concepts Inc(No 2) (1994) 13 ACSR 368 where Young J identified (at 371) the following three categories:
•where initially it is, or later becomes, impossible to achieve the objects for which the company was formed;
•where it has become impossible to carry on the business of the company; or
•where there has been serious fraud, misconduct or oppression in regard to the affairs of the company.
Austin J (at [137]) identified the following four complaints on which the plaintiffs in British-Israel relied:
(1)oppression by those controlling the defendant in the expulsion of the first plaintiff, and other members, as directors and members of the defendant;
(2)practical impossibility of carrying on the activities of the defendant resulting from a bifurcation in the board of the defendant, which cannot be remedied by resolution of members;
(3)failure on the part of those controlling the defendant to comply with statutory requirements and with the provisions of the constitution of the defendant;
(4)the wish of the UK Federation, as the parent body of the defendant, that the defendant would not continue to operate under its present control and be wound up.
Austin J observed that the case was one of bitter conflict rather than oppression of one group by the other. The competing factions were “more finely balanced” and the attempts at exclusion by the Palmer group had not succeeded (at [138]).
His Honour nevertheless accepted that it was practically impossible for the company to carry on its activities due to the bifurcated board. The vote of the general meeting could not remedy the paralysis because the company’s membership records were in “an irretrievable mess” (at [139]) and the register could not be accurately resurrected. Readmission of members would involve an exercise of discretion by the board, and was thus impossibly difficult, as the board members would be tempted to admit supporters and exclude opponents (at [140]).
His Honour stated that there remained “a company the board of which comprises bitterly opposed factions who clearly cannot work together and make sensible decisions for the future of the company” (at [141]). Austin J observed that it would only be possible for the board to make decisions if the ascendant group exercised its authority ruthlessly, yet the voting power in turn depended on an election by members whose identity could not be ascertained (at [142]).
His Honour also found that, as the plaintiffs alleged, the company had contravened a number of statutory requirements. It had failed to prepare the annual financial report and directors’ report for the year ended 30 June 2000, and had not had the financial report audited, contrary to the requirements of ss 292 and 301 of the Act. It had failed to send reports to members contrary to s 314 and had failed to lay the financial report, the directors’ report and the auditor’s report before an annual general meeting, contrary to s 317 of the Act (at [144]).

Austin J found that although such contraventions could provide grounds for winding up, they did not warrant such a drastic remedy, given the nature of the company and the fact that the Gregor group had also contravened provisions of the company’s constitution (at [145]). Accordingly, save for the more fundamental problems, his Honour would have considered the contraventions soluable by some lesser remedy.
Austin J found that winding up was warranted, because the membership could not be ascertained and the board was thus irretrievably bifurcated. Further, the London body, which had a legitimate interest and a significant role to play in the company’s affairs, supported the application to wind the company up. The London body also had the religious credentials to decide on accreditation of a new body to carry on the work of the British-Israel movement in New South Wales (at [149]).
His Honour concluded that there was a strong case for winding up the company. The plaintiffs had acted reasonably by proposing various means to resolve the deadlock so that the company could continue to operate, but the defendants had responded negatively to those sensible proposals (at [158]). Accordingly, as the grounds were established, no other remedy was available and the plaintiffs were not acting unreasonably in pursuing winding up, Austin J concluded that winding up was appropriate.
Despite some general similarities, in my opinion, the present case is distinguishable from British‑Israel in significant respects.
In contrast to the plaintiffs in British-Israel, the defendants in this case sought winding up only contingently, should their membership claims fail. The claim to winding up on the just and equitable ground, particularly in so far as it depended on alleged contraventions, was neither properly pleaded nor, in my view, clearly notified to the plaintiffs prior to the trial. The defendants did not comply with the formal requirements of an application for winding up, such as filing the consent to act of a liquidator and giving notice of and advertising the application in accordance with s 465A of the Act.
The committee in this case is not deadlocked. Nor, in contrast to British‑Israel, does the evidence establish the existence of two entrenched factions that cannot work together to conduct the company’s affairs. While at the commencement of the litigation Dr Tomar (and probably Ms Alister although there was no evidence to that effect) supported the Ranchi administration, Messrs Pillay and Pillai and Ms Nayak were unaligned to any administration. They (and Messrs Tanner and Largey) only relatively recently determined to support the Unity administration.
The schism in Ananda Marga occurred about seven years prior to Dr Tomar’s convening of the meeting on 20 March 2010, which precipitated this litigation, yet up to that time, the committee functioned for years without any obvious divisions or dissension, apparently pursuant to the Suva Sector resolution. For a lengthy period, voting was frequently unanimous. The voting pattern did not bespeak the existence of entrenched “camps” or blocs.
Accordingly, the schism in Ananda Marga long predated and cannot fully explain the present division in the board of the company.
The company also functioned effectively for many years unaffected by the split in India pursuant to the Suva Sector resolution. Dr Tomar acknowledged that notwithstanding the schism the company had continued to fulfil its objects up to the time of the litigation.
The board has not been deadlocked in the past, is not currently deadlocked under the interim regime and there is no evidence that it will be deadlocked in future. While a minority of the directors currently support the Ranchi administration, the company has endorsed and observed the Suva Sector resolution. There is nothing to suggest that the other directors would consistently vote against the minority who support Ranchi on the basis of their different allegiance.
Mr Pillai denied that he would always vote with Mr Pillay. It was not put to Ms Nayak that she would vote with Mr Pillay as a matter of course. Ms Nayak testified that the company sent money to whatever administration was chosen by the different nuns in the Suva Sector. She denied that the split in Ananda Marga was an obstacle to running the company.
Mr Tanner is not a member of the committee and had no firm intention to join it. Although Mr Pillay approached Mr Tanner to become a member, there was no evidence that Mr Tanner would blindly vote with him. Mr Tanner had relatively recently recognised the Unity administration. He stated that the split had had an impact in Australia “as a result of this case”.
Mr Largey is not a director of the company and was not recruited by Mr Pillay. Mr Largey testified that the company did not know where people sent their subscriptions. It was not put to Mr Largey that he would always vote with Mr Pillay.
I accept that as the plaintiffs’ witnesses testified, the company has in the past and can in the future accommodate the existence of the rival administrations and the lack of uniform allegiance by board members. The company currently makes payments on behalf of monks and nuns to the administration of their choice.
Accordingly, while the litigation may have entrenched personal differences and a breakdown in trust, the split in Ananda Marga and the related differing allegiances by committee members do not render it practically impossible for the company to carry out its legitimate activities.
The defendants did not allege serious misconduct or dishonesty by the plaintiffs or indeed any other party. They did not allege that the plaintiffs had dissipated or misapplied company assets or breached their directors’ duties in any other respect. They did not allege that the company had failed properly to carry out its legitimate activities in pursuit of the corporate objects. Indeed, their primary claim was that the company should continue under the defendants’ control.
The just and equitable ground confers a wide discretionary power. In Ebrahimi, Lord Cross reasoned that if a breakdown in trust and confidence is apparently due to the misconduct of the applicant, winding up will not be ordered if the other parties oppose it. While subsequent courts have rejected the notion that such misconduct by the petitioner is an absolute bar (Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692; 5 ACLC 222), it remains a significant factor relevant to the exercise of the court’s discretion.
The only breaches of directors’ duties clearly established on the evidence were those admitted by Dr Tomar. The plaintiffs’ additional allegations against Dr Tomar, Ms Alister and others considered in Ananda Marga Pracaraka Samgha Ltd v Tomar (No 2) [2010] FCA 1342 were not pursued or finally determined.
While the defendants asserted that the evidence established that persons in the wider Ananda Marga organisation made financial or other decisions for the company without reporting to the committee, their principal contention was that such persons were members of the company. The defendant directors clearly acquiesced in the relevant conduct.
Messrs Pillay and Pillai did not deny that committees and persons within the wider Ananda Marga organisation participated in company affairs in pursuit of the corporate objects. I accept, however, that as they testified, such entities accounted to the committee, which made the final decisions and that the company’s accounts were audited.
Access to the company’s funds or bank accounts by persons in Ananda Marga with no formal role in the company may be imprudent or poor practice, but not unexpected, given the nature of the company. While the evidence of the nature and extent of such arrangements was unclear, they were clearly endorsed by all directors and were not alleged to constitute a breach or contravention of any duty or provision.
I was not persuaded that the failure to provide Dr Tomar with specified financial information under the interim regime amounted to oppression or a basis for winding up under s 461(1)(k).
Nor was I persuaded that the specified directors’ belief that Ananda Marga is not a religion was, whether alone or in combination with other matters, a form of misrepresentation or a basis for winding up.
Nevertheless, it is clear that for a number of years, the company and various directors failed to comply with statutory obligations and did not institute any adequate policies or procedures for ensuring compliance in formal and procedural matters or appropriate record keeping and retention of records.
Some of the deficiencies were of a relatively formal nature, as I accept, that as Mr Pillay testified, the committee members met generally twice a year and as issues arose, including by teleconference. While formally identified annual general meetings were not held as required, in substance the committee and the board consisted of the same people.
Previous secretaries bore particular responsibility for many of the more procedural contraventions, many of which were in the past. The committee collectively, including the defendant directors, also bore responsibility. As in British-Israel, the nature of the company rendered such contraventions explicable, although unacceptable. I was satisfied that Mr Pillay, on becoming the sole secretary, attempted to rectify the deficiencies, including of record keeping, and was clearly conscious of the urgent need to professionalise the company’s management and procedures.
The evidence did not permit me to determine whether there was a failure consistently to take minutes and to update the members’ register, a failure to keep such records secure, or a combination of both deficiencies. I accept, however, that Mr Pillay was able to reconstruct a members’ register which accurately reflects the company’s membership. In contrast to British-Israel, there is no irretrievable mess. The members of the company have been ascertained.
CONCLUSION
In my opinion, the plaintiffs have established their entitlement to relief broadly in the terms sought in their amended application dated 16 April 2012.
The defendants’ allegations made by the further amended cross‑claim dated 4 November 2011, including in relation to membership of the company, breach of objects, oppression, failure of the substratum and the practical impossibility of achieving the company’s objects or carrying on its business were not established. Nevertheless, while dishonesty or serious misconduct was neither alleged nor established, the court cannot overlook the long‑standing pattern of multiple contraventions and lack of adequate procedures to ensure compliance with statutory requirements, which emerged on the evidence at trial, particularly given the company’s nature and scale of operation. I am not, however, at this stage persuaded that the company should be wound up on the just and equitable ground pursuant to s 461(1)(k) of the Act. While the matter is not without difficulty, I consider that the deficiencies exposed by the evidence may be addressed by means other than winding up (which is a drastic remedy of last resort) or a referral to ASIC.
Accordingly, I propose to defer determination of the application under s 461(1)(k) for a short period in order that the court may receive evidence in the form of a report to the court by an appropriately qualified independent expert (such as a relevantly experienced senior legal practitioner or liquidator) on whether, and to what extent, in his or her opinion:
(a)the company and the directors have, from 13 December 2010 (subject to the requirements of the interim regime established by the orders made on 13 December 2010) complied with all applicable statutory requirements in relation to meetings, keeping minutes, financial reports and audit, the lodging of returns and the keeping of books and records; and
(b)the company has taken or is implementing satisfactory measures and procedures to ensure future compliance with statutory obligations and requirements and appropriate standards of governance, whether by the retention of an appropriately qualified person or staff to assist and advise the committee and/or training for the directors and secretary or otherwise.
I shall invite submissions on the form of orders reflecting these reasons in relation to the amended application dated 16 April 2012 and (save for the application for relief under s 461(1)(k) of the Act) the further amended cross‑claim dated 4 November 2011.

I certify that the preceding six hundred and twenty-one (621) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dodds‑Streeton.
Associate:
Dated: 13 May 2013

Citation:		Ananda Marga Pracaraka Samgha Ltd v Tomar (No 6) [2013] FCA 284
Parties:		ANANDA MARGA PRACARAKA SAMGHA LTD (ACN 003 193 897), DEVENDHRAN VADIVELOO PILLAY and PRABANJAMURTHI PILLAI v SUNIL KUMAR SINGH TOMAR, CLAUDIA ALISTER, RICHARD PFEIFFER, TIWARI DAYASHANKAR, PAUL ALISTER, DIETER DAMBIEC, JAKE KARLYLE, LUKE DEACON, MIRAI DEACON, MICHAEL TOWSEY and DHARANENDRAN PARTHY
File number:		VID 208 of 2010
Judge:		DODDS-STREETON J
Date of judgment:		3 April 2013
Catchwords:		CORPORATIONS – Company limited by guarantee – objects include “to propagate the ideals, the philosophy and practice” of the Ananda Marga religion – all members typically directors – worldwide schism in Ananda Marga movement and emergence of two competing central administrations in Ranchi and Kolkata, India – company’s board resolves not to follow without scrutiny any directives of central administration – dispute over identity of members of company – defendants resolve to remove plaintiff directors – defendants allege membership of plaintiffs and their associates in breach of corporate objects and implied terms of constitution due to loss of good standing with Ranchi administration – whether membership of plaintiffs and their associates terminated - construction of company’s constitution – whether Ranchi administration and office holders hold legitimate authority in Ananda Marga – whether plaintiffs and their associates deprived of good standing in Ananda Marga – whether plaintiffs and their associates members of company – whether third to eleventh defendants members of company. CORPORATIONS – Oppression – s 232 of Corporations Act 2001 (Cth) – whether plaintiffs’ membership or control of company contrary to the legitimate expectations of members and purposes of incorporators – whether plaintiffs withheld financial information from first defendant or held meetings on short notice. CORPORATIONS – whether just and equitable to wind company up – ss 233 and 461(1)(k) of Act – whether failure of company’s substratum – whether deadlock – whether practically impossible for company to carry out its activities due to bifurcated board and incapacity to identify members – effect of multiple contraventions of Act – whether alternative to winding up.
Legislation:		Corporations Act 2001 (Cth) ss 46, 53, 168(1), 169(1), 231, 232, 233(1)(a), 234, 248C, 248D, 292, 301, 314, 317, 461(1)(k), 465A, 1322(4) Charitable Collections Act 1934-41 (NSW) West Bengal Societies Registration Act 1961 (India)
Cases cited:		Ananda Marga Pracaraka Samgha (ACN 003 193 897) v Tomar [2010] FCA 565 cited Ananda Marga Pracaraka Samgha Ltd v Tomar (No 2) [2010] FCA 1342 cited Ananda Marga Pracaraka Samgha v Tomar (No 4) [2012] FCA 385 cited Ananda Marga Pracaraka Samgha v Tomar (No 5) [2012] FCA 390 cited Ananda Marga Pracaraka Samgha & Ors v Acarya Raghunath Prasad & Ors (Unreported, Court of the Civil Judge (Senior Division) Purulia, West Bengal Title Suit No 305 of 2003, 18 March 2006) considered Bentley v Anglican Synod of the Diocese of New Westminster (2010) 326 D.L.R. (4th) 280 discussed Bratton Seymour Service Co Ltd v Oxborough [1992] 13 BCLC 693 cited Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 considered Dhami v Martin (2010) 79 ACSR 121; [2010] NSWSC 770 cited Ebrahimi v Westbourne Galleries Ltd [1973] AC 360; [1972] 2 All ER 492 cited Egyptian Salt and Soda Co Ltd v Port Said Salt Association Ltd [1931] AC 677 cited General Assembly of the Free Church of Scotland v Overtoun [1904] AC 515 considered Gregor v British-Israel World Federation (NSW) (2002) 41 ACSR 641 discussed International Hospitality Concepts Pty Ltd v National Marketing Concepts Inc (No 2) (1994) 13 ACSR 368 cited Kopilovic v Gatley (2005) 53 ACSR 64 considered Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1 discussed Morgan v 45 Flers Avenue Pty Ltd (1986) 10 ACLR 692; 5 ACLC 222 cited Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 45; 208 ALR 213; [2004] HCA 35 cited Re a Company (No 00709 of 1992); O’Neill v Phillips [1999] 2 All ER 961; [1999] 1 WLR 1092 cited Re a Company (No 007623 of 1984) (1986) 2 BCC 99,191 cited Shirim Pty Ltd v Fesena Pty Ltd (2000) 35 ACSR 221 cited Simon v HPM Industries Pty Ltd (1989) 15 ACLR 427 cited Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; 211 ALR 342; [2004] HCA 52 cited Toole v Flexihire Pty Ltd (1991) 6 ACSR 455 considered Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45 considered Wondoflex Textiles Pty Ltd [1951] VLR 458 cited Federal Court of Australia Practice Note CM7 Brown L, Shorter Oxford English Dictionary: on historical principles (6th ed Oxford University Press, 2007) Halsbury’s Laws of India, (New Dehli ed, LexisNexis, 2002) Vol 7, Civil Procedure, ‘3 Types of Injunctions’
Date of hearing:	26 and 27 March, 2 April to 5 April, 11 to 13 April, 16 and 17 April and 23 and 24 April 2012
Date of last submissions:	24 April 2012
Place:	Melbourne
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	621
Counsel for the Plaintiffs:	Mr C Gunst QC with Mr M Irving
Solicitor for the Plaintiffs:	Holding Redlich
Counsel for the Defendants:	Mr BE Walters SC with Mr TR Messer
Solicitor for the Defendants:	Moores Legal

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 208 of 2010

JUDGE:	DODDS-STREETON J
DATE OF ORDER:	3 APRIL 2013
WHERE MADE:	MELBOURNE

JUDGE:	DODDS-STREETON J
DATE:	3 APRIL 2013
PLACE:	MELBOURNE